Transcript: founded in 1978 by Bernie Marcus and Arthur Blank first two stores in Atlanta- 60,000 sq ft warehouses fastest growing retailer in US history first store 1979- 100th store 1989 "bill of rights"/"whatever it takes" consumer shopping not business transaction the Legend Benefits Customer Demographics HOME DEPOT INC. Comparison to Competition “You need to understand that doing business in China is unusual,” Largest demographic: baby boomer consumers 20-30 year olds, college-educated, no children Client types: Do it yourself Do it for me Professionals COO- Nick Swerdlow Employees Ticker Symbol: HD (NYSE) Stock price as of 4/17/13: __$72.80__ 52- week range: $46.37 - $74.19 Comparison to competition: Lowe’s HD = BLUE LOW = RED NOTE: coming out of recession, HD rose above LOW due to its pricing strategies Reported 255,195 Employees (2011) -Beats out Lowes (197,500) (2011) Forbes Rank #8 happiest employees (2011) Mission is to hire most committed employees in order to create the best customer service Positions offered in-store: -HourlySales associates, lot associates, cashiers, freight team members Management: -Store managers and assistant store managers More face time with employees Faster check out Improved customer experience Way by which you portray yourself to consumers will likely determine the type of people that decide to associate themselves with your brand Home Depot: Appeals to professional customers such as contractors and tradesmen Large shelving units stacked with numerous hardware material More “rugged” dynamic masculine appeal big box warehouse store Lowes: Big box warehouse store Provides customers with a bright environment containing white walls and floors that are well lit, items on shelves are more easily acceptable Novice customers are not intimidated largest home improvement retailer building materials home improvement tools lawn and gardening products supplier relations hurricane Sandy "Let's Get It Done" General Operations 8 Corporate Values 70% ordered by individual stores 24 Strategically placed facilities, no on-site storage Last Minute Decisions / Inventory Replenishment Operating Effects Positive/healthy growth in revenue and net operating cash flow points to positive outlook for future Low debt-to-equity and lots of cash Credit Suisse (equity research) views HD as one of its favorite stocks Spending on housing/home improvement has reached historic levels HD is committed to return the majority of its earnings to its investors through dividends or buybacks HD is a “core holding for a growth or income-oriented investor” Social responsibility towards the environment CMO- Blake Turner * “Six years later, yes the middle class is growing in the market but it’s not a ‘do it yourself’ market,” Tomé said. “They don’t live in houses with garages for tools. They wanted to hire someone to do it for them.” Quickly the company realized that the smaller store would be more productive and would be profitable, especially when compared with the 100,000-square-foot stores. Larger focus on e-commerce Employee efficiency Do not recruit with requirements, college degree, etc. Rather look for people with a specific set of qualities: Knows the layout of the store is knowledgeable of building supplies and how to use the products/services displays potential to work well in teams has an overall interest in Home Depot goods/service Want employees that they could see loving their job CTO - Sean King Human Resouces- Mading Jackson No training centers or special training prior to working Future Acquisition of USHS Home Depot vs. Lowes: Brand Image Financials CFO – Miles Schimmel Customer Satisfaction Economic expansion during the 90s Home improvement industry experienced rapid growth (consumers spent large amounts on improving their most expensive possession, their homes) Home improvement industry recorded $377 billion in sales in 2000 HD takes part in this success through its highly competitive pricing - Result beats competitors such as Lowe’s Online Supplier Center 2012 upgrade of these devices Largest expense Is the high cost worth it? Improved customer moral = repeat business Has Military and Olympic Athlete recruitment programs On August 7, 2012, HD announces its acquisition of US Home Systems (kitchen/bathroom cabinet production) $94.9 million deal 38% premium over USHS’s closing share price Following week, HD stock rose 5.8% Next 5 months, HD stock rose almost 40%, due in part to this acquisition OPerations Aims to gain momentum for sustainability progress at Home Depot Process Starting with the refinement of our Sustainability Strategy we maintained our focus on the five key areas for structured improvements: Energy/Water use Carbon Emission Sustainable operations Sustainable product assortment Supply Chain impact Claims that it beats out rival Lowes with its mass amount of employee benefits Health Insurance Medical, Dental, Vision Life and Other Insurance Life Insurance, Disability Insurance, Accidental
Transcript: Verdict Laws Behind the Case Accomplishments: -Corporate National and Community Service Spirit of Service Award for unparalleled support of the communities and people impacted by Hurricanes Katrina, Rita and Wilma (June) Corporation for National and Community Service (CNCS) -Golden Halo Award [joint award for KaBOOM! and The Home Depot] (June) Cause Marketing Forum -2006 Retail Systems Achievement Award in the "Best in IT/Business Alignment" category (June) Reflexis Systems 7 Female Employees: - Vicki Butler - Susan Ellis - Felicia Funderburk - Jacqueline Genero - Sheryle Jones - Kimberly Stoddard - Cheryl Williams I could not find any additional Information regarding the plaintiffs. Challanges Net Income: $1.38 billion, 2014 Home Depot - Declaration of 55 employees - 8 witnesses - Several forms Prosecutions Case How Many Plaintiffs Involved Products/ Services Offered - Declarations of 30 current and former female employees - Charts on plaintiffs' employment history - Declarations of two experts - Data breach that exposed several patrons' credit card information - Negligent security - Defective products Defenses Case When Lawsuit Was Filed Butler v. Home Depot Gender discrimination at Home Depot with their employees Rule 23 of the Federal Rules of Civil Procedure Appliances and home improvment tools December 12, 1994 -Upon termination you will be able to pick up your final paycheck on your next scheduled pay day. -All benefits will be terminated. Profit/ Loss Background on Plaintiffs $87.5 million settlement and modification of practices to ensure qualified women were hired & promoted -Partners with good360.org to help give charities in need of merhcandise - They donated $2.7 million to habitat for humanity in 2014 Employment Policy Why Lawsuit Was Filed Charity Work
Transcript: Home Depot's head quarters is located in Atlanta,Georgia. One of the CEOs of Home Depot is Francis S. Blake, and the founders of Home Depot is Bernard, Marcus and Arthur, Blank. In CNN's fortune 500 Home Depot's rank is 30! Unfortunatley Home Depot's reputation is not all the best because alot of people say that the pricing is not good, but Home Depot is a good store. Home Depot makes 61.5 billion dollars a year!!!!!!! Home Depot's mission is "taking care of our people." Here is sample of Home Depot's commercials. Their strategy is if you shop there your house will be perfect. Which is the strategy transfer, so it makes it seem like a Magical store. HOME DEPOT!!!!!!!!!!!!!!!!!!!!
Transcript: Services: Home Depot provides Licensed & Insured Installation Professionals, superior warranties on installation service labor and products, financing options, ect. About Home Depot, The Future Kreepy Krista The CEO of the company is Craig A. Menear He has more than three decades of experience in the retail and hardware home improvement industry, more than half of which have been with the company. Davian Martinez History By Lil Dave from the block like yerrrrrr 55 BILLION $$ Tyberious Jones The Home Depot was founded in 1978 by Bernie Marcus and Arthur Blank. The first two Home Depot stores on June 22, 1979, in Atlanta, Georgia.The Home Depot revolutionized the home improvement industry by bringing the know-how and the tools to the consumer and by saving them money. n 1981, The Home Depot went public on NASDAQ and moved to the New York Stock Exchange in 1984. 1989 marked the celebration of its 100th store opening. The company arrived in Canada with the acquisition of Aikenhead’s home improvement centers in 1994, and it began flying its flag proudly in Mexico in 2001 through the acquisition of Total HOME. In 2006, the company extended its reach to China by acquiring The Home Way, a 12 store chain. Krista Kuchie Scott Fritz $18.28 Billion Per Year (Ending Jan 31st) Bree Baldassano NET WORTH: TOTAL: 365,000 (2014) http://finance.yahoo.com/q/hp?s=HD&a=08&b=22&c=1981&d=04&e=7&f=2015&g=w&z=66&y=1716 The Enemy Home Depot looks to advance and surpass all competitors Breezy Bree Operating Expenses .Their prices and products are virtually identical, with each company offering the exact same low-price guarantee, but Home Depot routinely netted around $6.5 billion more per year than Lowe’s. Home Depot is simply a bigger company than Lowe’s and this unchanging fact was reflected in their unchanging advantage. At the beginning of 2012, Home Depot’s stock returns were about 61.5% higher than Lowe’s. By year’s end, they were about 103.01% higher, a gap that rests at around 93% today. Home Depot NYSE Trade . The Past: Lowe's Employees About the Fued . Today: http://finance.yahoo.com/q?s=HD References Interests Experience Education Skills
Transcript: Developed Kids Workshops to teach Building and Safety Skills Current Objectives 1981 Rent Lease Purchase Dividend Payment (use a table to compare payout ratios for the company with the industry and the competition for last five years) None Low Medium High Methods of Growth Internal Development External Acquisition Both Manufacturing/Operations Systems Degree of Automation Highly Automated Medium Automation No Automation Degree of Integration High Medium Low Plant Size Many Small Size Few Medium Size One Large Size Plant Location Near Raw Material Near Market Type Of Equipment General Purpose Special Purpose Production Scheduling (for manufactures) For Inventory For Customer Orders Inventory Levels (inventory turnover compared to the industry and competition for last five five years) High Medium Low Quality Control Tight Moderate Loose R&D Follower Leader R&D Emphasis Applied Balance Basic Engineering Emphasis (for manufactures) Product Balanced Process Nature of Product design (for manufactures) Modular Non-Modular Design Stability (for manufactures) Frozen Many Changes International VII. Develop Programs, Budgets, and procedures to implement each single plan Control Procedures By: Dylan Rolfe Erik Rodriguez Eugine Kim Kyle Laddusaw Tracy Teng THE HOME DEPOT, INC. Strategies Promotion Emphasis Consumer Do-It-Yourself Do-It-For-Me Professional Customers Seasonal Industrial Government Credit Restrictions Housing Bubble Advertising Media PART I CONTINUED: TRACY E-Commerce Mission Competitive Complimentary DEGREE OF CUSTOMIZATION STABILITY Objectives PART V: EXAMINATION OF THE EXTERNAL ENVIRONMENT GROWTH 180 Stores in Canada ? Stores in Mexico 7 Stores in China Push (provide examples) Pull (provide examples) Both (provide examples) 2013 COMPETITIVE STRATEGIES NATURE OF MARKET PART I CONTINUED: KYLE Print Radio TV Movies Billboards 1991 EXAMINATION OF TOP DECISION MAKERS Feedback First Store Open in Canada PART II: HISTORICAL REVIEW OF HOME DEPOT''S ACTUAL PERFORMANCE DEGREE OF SELECTIVITY OF CHANNELS 1986 The Board of Directors National Direct Selling to End Users Direct Selling to Retailers Whole-Sellers Local Regional National International 231 Stores in California Procedures BREADTH OF PRODUCT LINES Standard Modifications Custom PART III: ERIK Credit Compensation: non-management directors receive at least 2/3 annual compensation in equity Board members cannot sell stock until they are retired from the board, or one year after they choose to remove themselves 2011 independent members of the board received $50,000 in cash, and $230,000 in stock awards. Must be under 72 Cost Leadership Differentiation Local Budgets Retail Stores Low (not selective/ intensive distribution) Medium (selective distribution) High (exclusive distribution) New Plan Regional Independent Board Members GEOGRAPHIC COVERAGE RETRENCHMENT 15 Departments 4 Major Product Groups Plumbing, Electrical, & Kitchen Hardware & Seasonal Building Materials, Lumber, Millwork Paint & Flooring I. MISSION STATEMENT Undercut Competitive Overprice (premium pricing) First HD Mascot Appears in Advertisement PART IV: EXAMINATION OF THE INTERNAL ENVIRONMENT OF HOME DEPOT Multiple Distribution Channels Retail Stores E-Commerce Policies Team Depot Created The associate volunteer program To become involved and interact with customers Standards 1978 Programs Part VIII: Development of Control Procedures, Standards & Feedback To detect deviation from plans PART VI: NEW PLAN Details: The first super-sized store opens Covering 140,000 square feet. 1997 DISTRIBUTION FORMS Pricing Level First Store Opens in 1978 Founder of Home Depot...... HISTORICAL GROWTH STRATEGIES Home Depot Historical Timeline 1994 Senior Leadership Part VII: Programs Budgets & Procedures To implement each single plan NATURE OF MULTIPLE DISTRIBUTION CHANNEL
Transcript: HOME DEPOT 12/08/2011 https://corporate.homedepot.com/wps/portal/!ut/p/c0/04_SB8K8xLLM9MSSzPy8xBz9CP0os3gDdwNHH0sfE3M3AzMPJ8MAHxcDKNAvyHZUBAA3rcQa/ Disaster Relief The Home Depot and its more than 300,000 associates are passionate about helping their neighbors during times of need. When disaster strikes, The Home Depot is among the first organizations on the scene to ensure its customers have the supplies, resources and support they need to rebuild their homes and communities. The Home Depot takes an integrated approach to its disaster relief efforts through ongoing support of local and national non-profit partners and the mobilization of the Team Depot associate volunteers. The Home Depot is also a member of the American Red Cross Annual Disaster Giving Program (ADGP). The Company’s $500,000 contribution to the ADGP each year enables the Red Cross to respond immediately to the needs of individuals and families affected by disaster anywhere in the United States. Community Impact Grants Program Grants, up to $5,000, are available to registered 501(c)(3) nonprofit organizations, public schools or tax-exempt public service agencies in the U.S. that are using the power of volunteers to improve the physical health of their community. Grants are given in the form of The Home Depot gift cards for the purchase of tools, materials, or services. For 2011 funding, The Home Depot Foundation’s Community Impact Grants Program will accept proposals for grants beginning April 4, 2011 through August 14, 2011. Community Impact Grants Program Grants, up to $5,000, are available to registered 501(c)(3) nonprofit organizations, public schools or tax-exempt public service agencies in the U.S. that are using the power of volunteers to improve the physical health of their community. Grants are given in the form of The Home Depot gift cards for the purchase of tools, materials, or services. For 2011 funding, The Home Depot Foundation’s Community Impact Grants Program will accept proposals for grants beginning April 4, 2011 through August 14, 2011. Celebration of Service- "Serving Those Who Served Us All" The Home Depot Foundation is honored to support the housing needs of our U.S. military veterans and has pledged $30 million over three years to ensure that every veteran has a safe place to call home. To fulfill this goal, this fall, we will focus our volunteer efforts of our associates on service projects that support veterans or include working alongside veteran-volunteers. We will extend this "Celebration of Service" and allow other community groups to get involved through our Community Impact Grants Program by applying for a Celebration of Service grant. Beginning August 15, 2011 at 9:00 a.m. ET through Veterans Day (November 11), we will only accept grant proposal that specifically identify service projects that benefit veterans. For organizations that have started a Community Impact Grant application for a service project that does not specifically benefit veterans, we encourage you to submit your application prior to August 15 in order to be considered for funding in 2011. Our Community Impact Grant Program will resume in 2012. How to apply: To apply, please visit The Home Depot Foundation's web page by clicking here. Other ways we invest in the community: In-kind product donations are handled through our Framing Hope program in partnership with Gifts In Kind International. Please visit the program’s Web site to find out how your nonprofit organization could be matched to receive donations from a local Home Depot store. Our stores have a limited supply of $25 donation coupons to assist local nonprofits with their small donation needs. Please see a member of the store management team or the Team Depot Captain for more information. Team Depot, our associate volunteer force, uses the time and talents of our associates to meet community needs through hands-on service. Team Depot Captains at our retail locations actively seek great nonprofit partners to work with throughout the year. Visit our page on The Home Depot Foundation’s Web site for further information. Organizations requesting event and sports sponsorships should apply at www.homedepotproposals.com. The National Gardening Association, in partnership with The Home Depot, awards Youth Garden Grants to schools and community organizations with child-centered garden programs. Please visit the National Gardening Association’s Web site for more information or to apply. Application Considerations We receive many worthwhile requests and cannot accommodate all of them. Between August 15, 2011 and November 11, 2011, all grant proposals must specifically identify projects for veterans. Once grant applications are reviewed, all applicants will receive a written response within six weeks of receipt of a request. Please do not contact your local store or The Home Depot Customer Care helpline to inquire about the status of your application. Should you have any questions about this
Transcript: Founded 1978 company's ability to generate an adequate return on invested capital headquartered in Atlanta, Georgia Locations Current Assets/ current Liabilities 2012: 1.34 to 1 2011: 1.55 to 1 Current Ratio shows the company's ability to pay short term obligations. The higher the current ratio, the more capable the company is to pay of its obligation but a ratio under 1 suggest otherwise. Industry Average: 1.23 Publically traded on the NYSE Liquidity Current Ratio Company background Gross profit rate Asset to Equity Ratio Total Asset/ Total Equity 2012: 2.29 to 1 2011: 2.19 to 1 The amount of debt used to finance the company. How much of the companies assets are claimed by creditor's and stockholder's. Industry Average: 1.82 The degree to which an asset or security can be bought or sold in the market without affecting the asset's price. Home Depot Gross profit/Net Sales 2012: 34.5% 2011: 34.4% Stable gross profit margin is a sign of good financial health of the business Industry Average: 32.91% Profitability Retailer of home improvement and construction products and services Share value has remained higher than competitors in the past years due to a consistent income Continuously improving numbers each year. Sales have vastly increased due to "do it yourself" projects # 17 on Forbes Fortune 500 list Voted Best in IT for Retail 2013 Innovation Award for environmental leadership 2012 Award for Innovation Net Income/ Average Total Assets 2012: 11.1% 2011: 9.63% ROA shows us the profitability of a company relative to its total assets. The higher percentage shows the company is getting more efficient using its assets to generate earnings. Industry Average: 5.38% Based on Jim Harvey's speech structures Only planned on two stores, but now have more than 2248, with 12 in China Is now worlds largest home improvement retailer In all 50 states, all 10 provinces of Canada, Mexico, Guam, Puerto Rico, District of Colombia and Virgin Islands. Return on assets ratio
Transcript: Home Depot Although Home Depot has proved to be a philanthropic asset, their continuous human resource issues have proved a pattern of gender discrimination and unfair work conditions. The changes they have made to the workplace are ineffective and have very little to do with gender equality. Their effects in communities are evident as a result of their support of non profit organizations. Although this generates good public relations, this has a minor effect on their employees and customers. Questions Analysis Alex Melito &Hayley Miller The Issue Home Depot has a history of poor customer service and an unfair working environment. However, Home Depot thinks that customer surveys were poorly conducted and the results are not an accurate representation of true customer satisfaction. There are several examples of legal actions against the company involving discriminatory employee relations, especially gender discrimination. The most important stakeholders are employees, customers and communities. The philanthropic activities of the company are in the interest of the community stakeholders. The employee relations issues are dealt with poorly.
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